What can startups learn from the drug trafficking business?
Massive disclaimer: I do not endorse the buying and selling of unregulated and illegal drugs. I repeat I do not endorse anything to do with illegal drug selling, buying, trafficking, using etc. Additionally, I am not comparing the two lines of business as the same, nor am I suggesting that startups look for business guidance from drug traffickers/ trafficking. It’s worth stating that startups are legal businesses (most of the time) that are focused on creating new products or services, while drug trafficking is illegal and can have serious consequences for those involved.
Now that’s out of the way, let’s get to the good part…
During the holidays I got enough time to finish Netflix, somehow. One of the more interesting shows I watched was “How to sell drugs online”. While this particular show was from the perspective of techies and how they chose to run a drug business as some form of a startup, I have always been fascinated by films and documentaries on the illegal drug industry. A personal favourite is ‘The Wire’, a crime drama based in the city of Baltimore, that follows the lives of drug kingpins, and the efforts of local police to take them down. A new interest has been listening to older former drug traffickers talk about their lives in the industry and how they operated it. I’m always in awe of how much business acumen they needed to learn and implement daily. Insider does short exposés on how crime works and has featured drug traffickers such as heroin traffickers and cocaine traffickers, which are truly insightful.
Overall, we can all learn more about various business themes from the drug trafficking industry, not just startups. Some of these include the importance of adaptability and resilience, the need to stay ahead of competitors, the immense value of strong networks and partnerships, effective risk management and a focus on innovation and creativity. In this article, I chose startups because of the similarities to business, such as:
- Both tend to operate in high-risk environments or markets and require a certain level of risk-taking behaviour.
- Both require a large amount of starting capital and funding to maintain operations.
- Both rely on a great network of connections and relationships to succeed, especially at the beginning.
- Both require a deep understanding of market dynamics, customer needs and how these evolve.
- Both require the ability to quickly adapt and pivot in response to changing market conditions, challenges and opportunities.
So, what can startups learn from the drug trafficking business? The ABCs…
Adaptability and resilience of your supply chain. This is more targeted towards logistics startups or any startup with a huge dependence on logistical services. It is an understatement to say that drug traffickers are experts at moving products from one place to another. They need to have many intermediaries and a network of distributors to facilitate their supply chain. These intermediaries also offer the flexibility to change and adapt to market conditions and external factors, making them extremely resilient. Startups can learn to build adaptable supply chains that can’t be easily disrupted by rapidly changing market conditions.
Building a strong brand and loyal customer base. From the Netflix series ‘How to sell drugs online’, traffickers often aim to have a strong and recognisable brand that is associated with reliability and quality. Additionally, they offer exceptional customer service, which could be presented in various ways such as safety or convenience. This is critical in building strong relationships with their customers and ensuring repeat users. Startups can learn from this by establishing a strong customer success segment, which is adept at building user relationships and communicating the company’s brand distinctively from other players in the market.
Curated technology. It’s no surprise that illegal businesses are probably a significant segment of early adopters, and drug traffickers are no exception. These businesses tend to use a range of sophisticated technologies to run operations, track things and communicate. While in the past, this tech could be encrypted messaging systems and GPS tracking, it has now evolved to tech like web anonymity, blockchain, and well, encrypted messaging systems, still. Startups can learn to invest and leverage existing technologies that enable their primary business. This is especially true for tech-enabled startups, whose primary business isn’t a tech product.
Diversify and build multiple revenue streams. Oftentimes, drug trafficking businesses do not operate as just a single line of business, but are backed by an array of businesses that serve as money laundering schemes. Regardless, they have multiple sources of revenue. Startups can learn to diversify their revenue streams through product diversification, added value services to existing products, or other business arms.
I may have forced the ABCs, lol! Regardless, I’d love to hear some of the stories you’ve read on drug trafficking businesses that were or are fascinating.